In this series we will look at what is really necessary to have a successful Emissions Trading Scheme (ETS) . The ETS has been the focus of a lot of negative press recently. However, it is not the ETS which is the problem. Like any solution it is the design which is important. What credits are included, who is directly included (those that must comply), the targets and the timing are all key issues.
In Part 1 we will look at a key area of a well designed ETS - the quality of the credits included in the scheme.
This is probably the most important area of design. What we must ensure is that the quality of emissions reduction remains high. How do you measure carbon emission quality? Let's have a look...
When it comes to carbon credits, quality can be determined by the ability to demonstrate that the resulting reduction of carbon emissions is genuine, that is, it must be verifiable, measurable and additional.
Carbon credits in a compliance-regulated Emissions Trading Scheme offer emissions reduction that is robust and verifiable. The credits are easily measured and make additional cuts in emissions beyond agreed targets. Buying and cancelling credits ensures the carbon dioxide they represent will never be emitted.
This is proactive carbon emissions reduction – the emissions never occur. As opposed to projects that sequester carbon dioxide – which are reactive because the carbon has already been released.
At the same time your efforts help drive investment in low-carbon solutions because there are fewer credits available. In the long run, it helps ensure low-carbon solutions become more economically attractive – the only way to a sustainable future.